Sam Bankman-Fried headed to jail after bail revoked

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Sam Bankman-Fried.
Photo: AFP / SAUL LOEB

Sam Bankman-Fried, who was arrested on fraud charges last year after the collapse of his cryptocurrency firm, must await trial behind bars, a US judge has ordered.

The 31-year-old was handcuffed in court and led away, while his mother watched in tears after the decision.

Judge Lewis Kaplan had agreed with prosecutors who had accused Mr Bankman-Fried of trying to influence witnesses expected to testify against him.

He had denied the claims.

Speaking in court on Friday, Judge Kaplan said: “There is probable cause to believe that the defendant has attempted to tamper with witnesses at least twice.”

The hearing on whether to revoke Bankman-Fried’s bail came ahead of trial, which is scheduled for October.

The 31-year-old was arrested in December after being accused of misusing money from investors and customers of his bankrupt cryptocurrency exchange FTX to pay for property, political donations and plug losses at his hedge fund, Alameda Research.

The former billionaire denied the claims and was released to his parents’ home in Palo Alto, California on a $250m (£197m) bond.

He was forced to hand over his belongings from his pockets and remove his shoelaces, jacket and tie before the US Marshals Service took him away on Friday, according to Reuters.

His father was also in court and placed his hand over his heart as his son was led away in handcuffs.

The court had already moved to tighten restrictions faced by Bankman-Fried earlier this year, citing his efforts to contact people involved in the case and his use of a virtual private network.

The latest request from prosecutors was sparked by a July article in the New York Times, which quoted confessional writings by Caroline Ellison, Bankman-Fried’s sometime girlfriend and the former chief executive of Alameda.

In the article, Ellison, who pleaded guilty to fraud last year and is expected to testify against Bankman-Fried, was quoted reflecting on their break-up and how she felt “overwhelmed” at work.

Prosecutors said Bankman-Fried had shared the documents to try to make his case in the media that Ellison was a “jilted lover” who had worked alone.

They also argued that it would have a chilling effect on other potential witnesses because it could make them fear “personal humiliation and efforts to discredit their reputation” beyond what would be permitted in court. They said he had participated in roughly 1000 phone calls with members of the press in recent months.

His attorneys said he had shared documents that were already known to the reporter and had a right to speak to the media. They also said sending Mr Bankman-Fried to jail would hinder trial preparations.

Earlier this month, Judge Kaplan barred Bankman-Fried from speaking about the case.

Media groups, including the New York Times and the Reporters Committee for Freedom of the Press, had asked the judge to loosen the restrictions, citing free speech considerations.

The move to jail marks a further fall from grace for Bankman-Fried, an MIT graduate and son of Stanford professors, whose work in crypto transformed him into a billionaire.

Known for his curly head of hair, he became a high-profile spokesman for the industry, courting celebrities and politicians and appearing on magazine covers to promote digital currencies.

His firm collapsed abruptly last year after facing a run on deposits. Bankman-Fried has acknowledged sloppy record keeping but denied intentional wrongdoing.

– This story was originally published by the BBC